UK economy shrinks unexpectedly in blow to Rachel Reeves

City economists had expected the UK economy to grow by 0.1% in January. Photograph: Hollie Adams/Reuters

The UK economy contracted by 0.1% in January, dealing a blow to Rachel Reeves before the spring statement later this month.

In a surprise to City economists, who had expected 0.1% growth in January, the Office for National Statistics data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.